Wednesday, May 7, 2008

As anyone who reads this blog knows, back in February Zynga and SGN opened up their game networks to 3rd party developers. For the moment, these networks are essentially link exchanges facilitated through game bars embedded on the 3rd party developer's canvas page.

Fortunately, these embedded game bars resolve to unique addresses. For Zygna, it's zbar.zynga.com, and for SGN, it's sgnbar.com. You'll note the graphs below list zynga.com, not zbar.zynga.com, that's because Compete doesn't provide breakdowns on subdomains. However, according to Quantcast, ~99% of traffic to zynga.com is to the zbar.zygna.com subdomain, so for my purposes, zynga.com is the domain of interest.

First let's look at monthly unique visitors:

When looking at the graph, it's important to note that most 3rd party games didn't come onto the network until March. Keeping that in mind, April is the most telling month, Zynga increased their monthly uniques by 200,000, while SGN, increased by 300,000.

How much of this traffic increase can be attributed to the 3rd party games, and not growth in the game network's core properties? In SGN's case, all of it, their core properties have been in steady decline since December. I suspect, it's helped Zynga, as well, since growth in their core games has flat-lined, as well.

So it's seems that when in comes to acquiring new users, the game network strategy has worked very well for the game networks.

One interesting note, SGN claims 1 million daily active users, which is the aggregate number from all their core game apps. However, if you look at the monthly uniques count, it's around 425,000 for the ENTIRE network, including 3rd party developers. That suggests that there's an immense amount of user overlap between SGN's core game properties. If the Compete data is accurate, then it's unlikely that SGN has more than 400,000 UNIQUE daily active users across their core properties, with the caveat that their flagship game Warbook oddly does not have the gamebar embedded in it, so its visitors are not included in the graph above. However, Warbook has less than 40,000 DAU, most of whom probably play other games in the SGN network and are thus counted.

According to Adonomics, Zynga has about 2 million DAU. However, their monthly unique visitor count is 800,000. Again, suggesting that more than half of that audience plays more than one game and is counts multiple times in Adonomics aggregate number.

Having just pointed out the massive overlap, I'd like to point out that if we DID NOT see at least a 50% overlap of users between games, it would be much more troubling. It would imply that most users do not play more than one game in a game network, and therefore a game network would offer no value. So, clearly the games network strategy is working.

UPDATE: After being reminded by Joe G. of Flixster that Compete only tracks U.S. visitors, it occurred to me that the gap between DAU and monthly unique visitors could be a result of a large number of Zynga and SGN's users being located outside the U.S. That would hardly be surprisingly, since Facebook (which provides the large bulk of the traffic) has an enormous international audience.

With that in mind, now I'm concerned that we might not be seeing the overlap I identified above, which WOULD suggest that game networks are effective at sending users to other games on their network. Right now, I can't answer this definitively one way or the other because of lack of the necessary data. Sigh.

Now that we have the monthly unique visitor count, we can compare SGN and Zynga to destination game sites that do not have social network integration. Which I will have to do tomorrow, as Compete's web server is currently down. Drats.

Now, let's look at pageviews, one of the standard metrics of engagement:

Again, April is the interesting month here, since it's the most recent data and it's the month where both networks had fully launched. In April, Zynga's pageviews increased slightly, but SGN's pageviews took a 25% nosedive. Why? I have no idea. Speculate in the comments.

Finally, my favorite metric, average length of visit. As a measure of engagement, I find this metric to be most accurate when comparing different types of games.

Both SGN and Zynga experienced a severe drop in engagement from March to April. This drop is troubling. Both networks added 20+ games between late February and April and engagement drops. You would think it would be the opposite, that engagement would increase, as users spend time trying out the new games. But they spend less time, suggesting that either they got bored fast of the new games, or they didn't even try the new games. Which I think may have happened, since both networks operate as link exchanges that offer more presence to games that send them traffic. As a result, only games with significant traffic independent of the network got heavy placement on the gamebar. I doubt many small games got a significant boost in traffic from participation in either game network. Looking at three games on the Zynga network: Perfect Warrior, Downman, and PuzzleBee; none show any noticeable bump in growth during the last three months. In fact, PuzzleBee saw a slight decline.

I think that unless Zynga and SGN become much more generous in promoting small non-viral games, both networks will not see any boost in engagement.

The fact is, many of these small games are highly engaging, but lack virality. They need a network to promote them in order to succeed. The 1:1 economics of link exchanges will not solve this problem.

It appears for the moment, that game networks benefit the network, far more than they benefit the independent developers. I hope that will change.

Predictions

My prediction is that we'll see growth plateau quickly for both game networks, topping out by July (barring acquisitions, and expansion into new markets which will mask their stagnation in the maturing Facebook market).

My other prediction is that we're going to see a lot more acquisitions designed to mask stagnant growth.

My other other prediction is that Texas Holdem Poker will dominates all social networks.